Danish Crown sells Tulip for £290m
28th Aug 2019 / By Alistair Driver
Danish Crown has sold Tulip, the UK's biggest pork producer, to Brazilian-owned food giant Pilgrim’s Pride Corporation for £290 million ($354m).
Pilgrim’s, which employs more than 51,400 people and operates chicken processing and prepared foods facilities in 14 US states, Puerto Rico, Mexico, the UK and continental Europe, has signed a contract to acquire the struggling pork processor from Danish Crown. It already has a strong presence in the UK poultry sector, owning Northern Ireland-based Moy Park. The company's website boasts that 'nearly 1 out of every 5 chickens in the US comes from Pilgrim's'.
Although its headquarters are in the US, for the past decade, it has been owned by Brazilian company JBS, one of the biggest meat manufacturers in the world.
Pilgrim said the the transaction solidifies its position as a leading European food company, creating one of the largest integrated prepared foods businesses in the UK with a portfolio of brands and retail private label solutions.
Jayson Penn, Pilgrim’s global chief executive officer, welcomed 'the talented Tulip Limited team members and management team', led by Andrew Cracknell, to the Pilgrim’s family. "We look forward to working together to drive growth and deliver value for our stakeholders,” he said.
Mr Cracknell, who was appointed as Tulip CEO last autumn to oversee a ‘major transformation’ of the business, said: “Pilgrim’s is acquiring an industry-leading farming operation, a strong team of dedicated people and a network of well-invested manufacturing sites."
Tulip, with a fully integrated supply chain, is the largest pig producer in the UK, owning many pig farms and operating 12 production facilities throughout the UK, with nearly £1 billion in annual sales and more than 6,000 members of staff.
Danish Crown said Tulip, its UK arm, was 'dragging down’ its results in November, after Tulip posted a loss of £31 in 2017/18, following on from a £27m loss the previous year. This prompted an ongoing cost-cutting exercise at the UK pork processor.
Under terms of the agreement, Danish Crown will continue to supply Danish pork to Tulip under a long-term supply agreement.
Jais Valeur,Danish Crown, Group CEO, said: “We want to simplify our UK business. Going forward we will supply Danish pork to Pilgrim’s, so all in all the transaction holds out interesting perspectives for both parties."
For more on this story, see Pig World